29.10.2020

JLG ends year on a low

JLG and its parent Oshkosh have published their full year and fourth quarter results with sharply lower sales.

Starting with the full year results - the 12 months to the end of September - JLG revenues were $2.5 billion, 39 percent down on last year. The sales are broken down into three categories:
- Aerial work platforms at $1.1 billion, a drop of 43 percent
- Telehandlers down 46 percent to $680 million
- Others - mostly parts and services - which came 17.5 percent lower at $723.6 million.

Operating profit for the year was $198.6 million, a reduction of just over 60 percent, although $15.1 million of the reduction was one off restructuring costs. In a like for like comparison the drop was closer to 57 percent.

Moving on to the fourth quarter some areas showed signs of easing a little, although total sales suffered the same percentage declines - 39 percent - to $615 million. Aerial lift sales fell 37 percent to $301 million, while telehandler shipments were 56.5 percent lower at $133.9 million and other revenues were 22 percent lower at $180 million.

Operating profit was 25.3 million - after allowing for $7.5 million of restructuring costs - a fall of 80 percent (74 percent on a like for like). Some slightly more positive news is the backlog which was just six percent lower than this time last year at $366.7 million.

Oshkosh as a group reported total full year revenues of $6.9 billion, a reduction of just over 18 percent, with a similar percentage decline in the fourth quarter. Pre-tax profit was $439.1 million, a fall of almost 42 percent.

Oshkosh chief executive Wilson Jones said: “As demonstrated by our solid performance in the fourth quarter, Oshkosh team members continued to work hard and delivered strong results in the face of adversity and global uncertainty caused by the Covid-19 pandemic. We responded to changing markets across the globe by taking swift actions to control costs and deliver value to our customers across numerous essential businesses. As a result, our team delivered fourth quarter adjusted diluted earnings per share of $1.30 on revenues of $1.8 billion.”

“It’s clear that our rental company customers continued to limit their spending on new capital equipment, which impacted our sales again in the fourth quarter and causes uncertainty in our revenue outlook for our Access Equipment segment for 2021. However, Oshkosh is a different integrated global industrial, and our Defence and Fire & Emergency segments provide a solid foundation to offset this impact as we move into the new fiscal year.”

“I am confident in our team’s ability to navigate through these challenging market conditions and position Oshkosh to take advantage of future opportunities. While we are not providing a quantitative outlook for fiscal 2021 today, as the timing and magnitude of recovery in our access equipment and some commercial markets remain uncertain, we are staying close to our customers and will respond to opportunities that arise. We are confident in the long term potential of our end markets and will continue to rely on our People First culture as we persevere through the current environment.”

Vertikal Comment

JLG does not seem to have performed quite as well as one or two other companies in the access market in terms of revenues, partly due to the sharp drop in telehandler sales in the fourth quarter – although to be fair the comparison is with a very strong telehandler quarter in 2019. The steeper decline in 'Other’ revenues was also a little surprising. However, JLG has fared better than most in terms of profitability levels, even though its percentage declines are similar to its competitors.

Always ready to look for the positive, while the order book is perilously short at around six to seven weeks, it is not far off where it was this time last year. Although last year it was just a third of where it had been the year before and was almost certainly a factor in the company’s weak first quarter sales performance. In that quarter - October to December 2019 - order intake surged to more than $1 billion by the end of December - will we see something similar this time? In the six weeks after the presidential election? That might depend on the outcome and whether a second wave of the pandemic hits the US. Watch this space!

In summary while the percentage comparisons are not wonderful the company did generate a profit at the operating level, and the group as a whole is cash positive so really not that bad a place to be given the level of the current crisis.